Should open chords be avoided on electric guitars?

Anything goes in music!!

However, the harmonics of certain chords don't do as well as others when distortion is added (strange jazz chords). Sometimes playing full chords on electric sounds great, but depending on the purpose of the song you might want a tighter sound, so playing power chords (barre chords) will give more room for the vocals or lock in more with the bass possibly. For textures you could strum over a distorted open chord with some chorus or flange and it would sound great. It hinges on what dynamic you are going for and the genre of music, but there is no right or wrong method. It's all about creating.

Its not one or the other. Its whatever the song calls for and what you like. I use open voicings a lot in Rock. So does Cantrel and countless others. Gor for it. Try something new. The minute someone says you cant do something you just work that much harder to do it. Any gunslinger guitarist will tell you that.

Interestingly though, that Pete Townshend plays a lot of open chords...in fact listen to many of the old Who songs built on variations of open D and A (intro to Pinball Wizard)

You can use open chords on an electric guitar, even "bizzare' 5 and 6 note chords work well. The trick is to not use a massive fuzz pedal, less is more as the phrase goes. If you're playing a song with an open A7 chord and can't hear it through your amp, you should probably turn down your distortion.

I haven't ever heard this. I imagine the arena rock, power chord and punk rock crowds might object to the notion. Perhaps a barre chord gives you more control over staccato? Perhaps you're less likely to bust a string when doing a windmill ala Pete Townshend. Whatever it is, I would say, if you like the sound of it, go ahead and play the open chord.

Depending on the situation, it can be very difficult to transpose open chords, without a capo, and still retain the same feel. A full G in ope position sounds different than a full D. I use a system of four voice barre chords that let me put any note in the melody, or control any other voice while the others move by step.